Vice Mayor Dickey called the meeting to order at 5:46 p.m.

Mayor Nichols was excused from the meeting.

Councilmember Archambault MOVED to convene the Executive Session and Councilmember McMahan SECONDED the motion, which CARRIED UNANIMOUSLY (7-0).  

Councilmember Leger MOVED to adjourn the Executive Session at 6:25 p.m. and Councilmember McMahan SECONDED the motion, which CARRIED UNANIMOUSLY by those present (6-0).

    *     CALL TO ORDER AND PLEDGE OF ALLEGIANCE

Vice Mayor Dickey reconvened the Regular Session at 6:30 p.m.  

Mayor Nichols was excused from the meeting.

1)    Presentation of a check in the amount of $27,217 by Dick Schmidt to the Town of Fountain Hills representing funds raised by the ADOG organization.

        Dick Schmidt addressed the Council and stated that volunteer groups in Town had done an excellent job of collecting funds.  The Town had a Skate Park because of their efforts, a Splash Park and a number of things in the Dog Park.  He challenged the current and future Councils to “ take the money and run!”   He said it took a long time to get the lights going but now he would like to present the Council with a check for $27,217 as part of the payment for the lights for the Dog Park and said he hoped that everyone would enjoy them.

        Vice Mayor Dickey thanked Mr. Schmidt and all of the volunteers for their hard work and generous donation that would benefit the entire community.    

        2)    Recognition of Bud Oshman for his service on the Board of Adjustment.

Vice Mayor Dickey said that the Council would now like to recognize Bud Oshman who served on the Board of Adjustment from November 21, 1996 until January 31, 2008. She said that Mr. Oshman was a very valuable member of the Board and the Council and Town staff wanted to thank him for service in this capacity for six terms.  The Vice Mayor said that Mr. Oshman was not present but they send him the plaque in appreciation of his service.

3)    Recognition of Mark McDermott for his service on the Community Center Advisory Commission.

      Vice Mayor Dickey announced that Mark McDermott had served on the Community Center Advisory Commission from January 2006 to December 2007.  She stated that the Council and staff appreciate Mr. McDermott’ s dedication and service to this Board and the Community Center.  The Vice Mayor presented Mr. McDermott with a plaque commemorating his service to the Town.

4)    Recognition of Robert Hoffman for his service on the Public Safety Advisory Commission.

    Vice Mayor Dickey stated that Robert Hoffman had served on the Public Safety Advisory Commission (PSAC) from 2004 until December 2007.  She stated that the Town Council and staff wished to thank Mr. Hoffman for his contributions to the Town and presented him with a plaque commemorating his service.

5)    Presentation by the Branch Director Rich Schultz of the Boys and Girls Club of Greater Scottsdale –  McKee Branch.

Mr. Schultz, Branch Director of the Boys and Girls Club of Greater Scottsdale –  McKee Branch located in Fountain Hills, addressed the Council and highlighted a brief presentation that outlined the organization’ s goals and achievements, Mission Statement and Vision Statement.  He discussed one of the programs, “ Passport to Manhood,”  and said that this program was part of the organization’ s grant partnership for the Teen Center.  He said that they implemented eight new teen programs over a three-year period, for a total of 30 programs that were occurring in the Teen Center.  He noted that the programs were free of charge to members, one hour per week for twelve consecutive weeks and he outlined the various programs.

Mr. Schultz noted that “ Passport to Manhood”  was a national program and its goals included promoting responsibility, reinforcing positive behavior and developing character in adolescent males grades 6 ^th through 12^th.  He expanded upon the subjects covered under this program and their positive impacts on the targeted participants.  He reported that during the first program they enrolled 15 members and each member had completed 25 hours each, totaling 275 hours of community service.  He outlined the events that they had participated in and said that between the pre-tests and post-tests, they had found that the participants had achieved a 22% increase in knowledge based on diversity, substance abuse, relationships with girls, etc.  Over 270 members had participated in the Teen Center’ s various programs, an increase of 10%, and over 3,000 community service hours had been completed during a 12-week period.

Mr. Schultz provided additional information relative to the success of the various programs and noted that an additional grant had been received to assist them in their efforts.  He introduced Jeff Grubb, a member of the “ Passport to Manhood”  program, who had also been involved in the Keystone Club, Money Matters, Youth of the Year Program and was now a staff member who mentored the younger youths.

Mr. Grubb addressed the Council and said that he had been a member of the Boys and Girls Club –  McKee Branch for a little over three years.  He discussed the valuable support and guidance he had received and the impact the programs had on him personally as well as on other youths and said that he was proud to now be part of the organization assisting others.  He thanked the Council for their support of this valuable program.

Vice Mayor Dickey and the Council thanked Mr. Grubb for his comments and service.

Mr. Schultz thanked the Council, and in particular the Mayor, for their positive impact on the Town’ s youth.

    *     CALL TO THE PUBLIC

There were no citizens wishing to speak.

Councilmember McMahan MOVED to approve the Consent Agenda as listed and Councilmember Archambault SECONDED the motion.

A roll call vote was taken with the following results:

Councilmember Kehe            Aye

Councilmember Schlum            Aye

Councilmember Leger            Aye

Vice Mayor Dickey            Aye

Mayor Nichols                Absent

Councilmember McMahan        Aye

Councilmember Archambault    Aye

The motion CARRIED UNANIMOUSLY by those present (6-0).

Public Works Director Tom Ward addressed the Council relative to this agenda item and explained that this was an item that was contained in the Town’ s Annual Storm Water Management Program.  He said that they make commitments to do a better job at storm water and this particular item was a decant station that staff had looked at closely; they had gone out to other cities and talked to them about this item.  He noted that many if not all cities and towns in Maricopa County (as well as across the United States) had this type of decant disposal facilities. He discussed visits staff had made to two cities that were specifically using the brand that staff was recommending and reported that the municipalities had been extremely satisfied with the results of the decant station.

Mr. Ward stated that maintenance costs would be approximately $1,000 a year (for filters and other items that might wear out).  The facility would also provide a one-year warranty that covered free labor and support on warranty issues.  The system was a “ closed loop”  system and would not produce any water that would leave the system; it was self-contained.  The self-contained unit would permit the street department to clean equipment, vehicles and the street sweeper and it would collect all of the wastewater and recycle if for use, while removing the sediment.  The unit met Federal wastewater regulations and includes an internal conveyor, media filter, absolute filter, etc. The solids were then dumped into a dumpster and disposed of at an appropriate landfill.  The unit would require a 20-foot by 40-foot area and could be moved, if necessary, in the future.

Mr. Ward emphasized that this action was required under the Storm Water Management Plan and noted that if the Town failed to comply it would be subject to fines.  He stated that staff recommended that the Council approve the purchase with Riveer Environmental.

In response to a question from Councilmember Leger, Mr. Ward confirmed that Storm Water management was a non-funded Federal government mandate.

Councilmember Archambault asked whether this would help the Town meet Maricopa County’ s Air Pollution criteria and Mr. Ward advised that it would.  The PM-10 measures (removing debris off of the street) would improve.  In response to Vice Mayor Dickey, Mr. Ward noted that the water stayed fresh due to evaporation and cleaning and that the water was recycled and not dumped.

Vice Mayor Dickey said that she “ bragged about the Town of Fountain Hills”  at DEQ today and said that she supports this purchase.

Councilmember Leger MOVED to approve the Purchase Agreement with Riveer Engineering and Councilmember McMahan SECONDED the motion, which CARRIED UNANIMOUSLY by those present (6-0).

The Vice Mayor thanked Mr. Ward for his presentation.

Supervisor of Recreation Bryan Hughes addressed the Council relative to this agenda item and said that the purpose of this action was to approve an amendment to the Construction Manager at Risk Agreement with Valley Rain Construction Corporation that was approved by the Council in November.  He stated that this was to establish what they hope would be two maximum guaranteed prices to construct improvements to Desert Vista Neighborhood Park.  He highlighted a brief PowerPoint presentation showing the Desert Vista Master Plan, which was updated in February 2007 to reflect current and long-term needs of the community.  He noted that highlights included a restroom/storage/concession building, athletic field lighting, area lighting, picnic and shade armadas, parking improvements, connecting sidewalks and entryways, landscaping, irrigation and site amenities.

Mr. Hughes advised that Phase I would consist of construction of the restroom/storage/concession building, including utilities; installation of sidewalks, entryways and other hardscape; electrical infrastructure for area and athletic field lighting; drinking fountains; landscaping and irrigation and demolition and grading.  Phase II would include installation of area and athletic field lighting fixtures and poles; picnic and shade ramadas; playground equipment; skate park entryway; trash enclosure; site amenities; signage and completion of parking improvements.

Mr. Hughes discussed negotiations that had taken place with Valley Rain and noted that initial funding for improvements was approximately $1.2 million.  He said that the first guaranteed maximum price came in at a little over $3.3 million.  He explained that the construction market was constantly changing and costs continued to increase particularly for petroleum-based products, which was used for irrigation PVCs, oil and asphalt for parking, etc.  He added that concrete and copper wire costs were constantly going up.  He noted that the project also came in over budget due to the fact that a significant amount of time had lapsed since the original estimate was received (approximately one year).  He said that staff had determined that the increases were “ across the board”  and sat down with Valley Rain and Olsson Associates, the design team, and reported that every line item had increased.  Staff worked with Valley Rain on methods to save money without compromising the project (i.e. use PVC-type piping instead of copper, eliminating chillers on some of the drinking fountains that were really not needed if there was a chiller at the building, changing the block from a trend stone block as seen at a lot of the ramadas at Fountain Park to just a typical block that could be painted, etc.  Mr. Hughes advised that staff felt it was very important to concentrate on the cost of the entire project, the absolute maximum that it would cost long term.

Mr. Hughes informed the Council that the final maximum guaranteed price came in at a little over $3 million and staff decided that it may be best to divide the project into two separate phases with two guaranteed maximum prices over two Fiscal Years.  The first one, that the Council was considering this evening, was approximately $2.1 million and the balance would be approximately $900,000 (next Fiscal Year).

Mr. Hughes discussed phasing and said that construction of the restroom/concession building was a number one priority along with insulation of the sidewalks, entryways and other hardscapes that people would be able to walk on, electrical infrastructure for athletic field lighting, drinking fountains, landscape and irrigation, demolition and grading (including some of the alleyway for parking).  He added that Phase II would consist of insulation of the athletic field and area lighting, picnic and shade ramadas, playground equipment, skate park entryway, trash enclosure, site amenities, signage and completion of the parking improvements.  He stated that the goal was to make it easy to move from Phase I to Phase II.

Mr. Hughes informed the Council that the risks associated with the proposal (two guaranteed maximum prices and two phases) included the fact that there was no guarantee that funds would be available in future Fiscal Years and, in this case, next year.  He said that delaying the project would only continue to add to the costs and not completing the project could affect grant funding.  He noted that the Town had applied for and accepted two grants for over $1 million over the last year and added that according to the grant agreements, the Town must complete the whole project or begin eliminating the scope of work and receive approval from the organizations that issued the grant funding.  He said that the project could ultimately be jeopardized if the Town did not build what they said they would with the monies (could be deemed non-compliant and receive only a portion of the funding or no funding).  Mr. Hughes stated that staff believed that the project should be a priority in the next Fiscal Year in order to maintain the grants.

Additional discussion ensued relative to the funding available in the current Fiscal Year and where it came from; the fact that funding had already been committed for pre-construction services in the amount of $32,533 in the Construction Manager at Risk At Risk agreement with Valley Rain, along with another $144,168 with Olsson Associates for Construction Administration Services and the fact that the first Guaranteed Maximum Price with Valley rain was $2,099,396.09, which brought the total cost in the current Fiscal Year to $2,276,096.09, which was under the budgeted amount by $13,534.

Mr. Hughes said that staff recommends approval and indicated his willingness to respond to questions.

In response to a question from Councilmember Kehe relative to the use of development fees, Mr. Hughes advised that the use of the Parks & Recreation Department’ s development fees were restricted and must be used for capital projects related to growth that impacts the Town’ s parks and recreation facilities.  He added that if the fees were not used within a specific period of time, the money must be returned to the developer.

Mr. Hughes responded to Councilmember Schlum and said that the Town had received all of the grant monies available for this particular project and noted that the Heritage grant provides up to three years in which to complete the project and the Sports & Tourism Authority would like to see the project completed within a year.  They wanted to see most of the funding lined up ahead of time before application was made and the Town complied and they had all of the funds that the Council was reviewing this evening.  They were even able to leverage the $775,000 from State Parks as part of the match for that particular grant.  The Authority assumed that all of the funding had been “ locked in place”  and neither the Authority nor the Town thought that the project would come in over budget.  He said that he had been trying to contact the Authority to see if there was any leeway and what scope of the project they were most concerned about and would find out if there was any flexibility as far as the Heritage grant as well.

Councilmember McMahan commended staff of their efforts to secure the grants.

Vice Mayor Dickey said that there was approximately $14,000 that could be put against the next phase of the project and asked how much money would be available in development fees next year that could be used for this project.  Mr. Hughes responded that they were still working through the budget process and that number was not yet available.  Vice Mayor Dickey stated that basically the grant was given with the understanding that the Town would complete everything on the list and that the project was a priority.  Phase II would have to be completed. Councilmember Kehe noted that was a challenge on frugal spending as development fees used for Capital projects should be paid for by growth.

Councilmember Leger said that under normal circumstances with the downturn in the economy he would be sensitive about spending $2 million.  He added, however, that they were looking at $1 million in development fees that were dedicated to parks and recreation and they had $1 million in grants.  He stated that for that reason, he would support the expenditure but wanted to make it perfectly clear that they were in a downturn and tightening their belts but if they delayed they would lose the grant money and construction costs would only continue to escalate.

Vice Mayor Dickey asked when they hired consultants or experts to project what something was going to cost whether there was ever any type of “ risk”  on their part.  Mr. Hughes replied that staff had asked the consultant the very same question and their response was that they were not a contractor and could only base their estimates on current market values.  They had done the very best they could but there were never any guarantees.

The Vice Mayor said that she hoped that the Sports & Tourism Authority took that into consideration.

There were no citizens wishing to speak on this item and the Vice Mayor called for a motion.

Councilmember Archambault MOVED to approve the amendment to the Construction Manager at Risk Agreement with Valley Rain Construction Corporation establishing the first of two Guaranteed Maximum Prices (GMP) in the amount of $2,099,395.09 for the construction of Desert Vista Neighborhood Park Improvements and Councilmember Schlum SECONDED the motion, which CARRIED UNANIMOUSLY by those present (6-0).

Ms. Zanon advised that this item related to consideration of the Sidewalk, Landscape and Lighting Easement Agreement with Chapparral City Water Company on Parcel E at Desert Vista Park.  She said that this was something that staff had been working on for some time.  The Town had been utilizing Parcel E as park area under an “ Improvement and Usage License”  from MCO and the Town was attempting to negotiate a more formal License Agreement for the usage of the parcel until such time that it was needed by CCWC for that potential future well site.  Generally the upcoming Town Park improvements had been mostly kept out of Parcel E due to that potential future CCWC usage.

Ms. Zanon confirmed that at a future date there could be a structure at the well site.  Mr. Hughes added that it might consist of a small wall that would not affect any of the amenities at the Park. He added that there would be some landscaping and Ms. Zanon noted that staff was requesting that they keep a 10’  sidewalk landscaping and lighting easement associated with it so there was a buffer.

Councilmember Schlum MOVED to accept the Sidewalk, Landscape and Lighting Easement Agreement with Chapparral City Water Company on Parcel E at Desert Vista Park and Councilmember Archambault SECONDED the motion, which CARRIED UNANIMOUSLY by those present (6-0).

Vice Mayor Dickey declared the public hearing open at 7:25 p.m.

Senior Planner Bob Rodgers addressed the Council relative to this agenda item and highlighted a staff presentation on the issue.  The Town Council initiated this zoning amendment at their November 15, 2007 meeting and staff was directed to review the feasibility of revising the Town Center Commercial District (TCCD) regulations in order to potentially allow for the creation of a more intense downtown style development than the current TCCD or current zoning district allows.  The TCCD District was originally designed to allow downtown development by providing for a variety of pedestrian oriented mixed land uses in the Town Center area.  He read from Chapter 18 of the ordinance and noted that the intent of the district was to encourage the development and sustainability of a vibrant, mixed-use area where residents and visitors could live, work, shop, dine, be entertained, enjoy community and cultural events and contribute to the economic viability of the Town Center area and the Town as a whole.

Mr. Rodgers said that with the above listed goals in mind, he would outline the major changes in the District Guidelines contained in the proposed ordinance amendments.  The major changes included:

Mr. Rodgers briefly discussed the intent and goals of the above listed proposed changes.  He stated that the proposed ordinance revisions outlined in the report would significantly change the TCCD Zoning District regulations.  The changes would increase the viability of commercial or mixed-use development proposals in the downtown area by allowing for a greater degree of flexibility in building design and in the design of parking facilities.

Mr. Rodgers commented that the Town was beginning a gradual transition from a “ growth” community to a “ maintenance”  community.  The currently vacant downtown area was a prime candidate for infill development and the Town must take every opportunity to ensure a quality of development that would provide long-term benefits.  As the Town moves forward in time, there would be more emphasis on maintaining the positive aspects of the community.  Some of those positive features were an enhanced overall architectural appearance of the downtown area, improved site design, retail and entertainment opportunities and the preservation of open spaces.

Mr. Rodgers informed the Council that staff had received two inquiries (attached to the report) from citizens regarding the proposed text amendment with concerns expressed.  However, most concerns had to do with the potential effects of any development on the downtown property rather than with the text amendment itself.  Therefore, staff recommended that the abutters’ concerns be provided to any developer and included and addressed in any future review of a development proposal if and/or when one was submitted.  He noted that the Planning & Zoning Commission voted at their regular meeting of January 10, 2008 to recommend approval of the proposed TCCD ordinance amendments and recommended that the Council approve the proposed text amendment to Chapter 18 of the Fountain Hills Zoning Ordinance as outlined in staff’ s report.  He indicated his willingness to respond to questions.

In response to a question from Councilmember Schlum relative to building heights (particularly theaters/architectural enhancements), Mr. Rodgers stated that the new ordinance would allow a 40-foot height limit as a base and if someone wanted to go over 40 feet, they would have to propose that as part of their concept review process with the Planning & Zoning Commission. The Commission would weigh the pros and cons taking into consideration any architectural features that might hide rooftop equipment, etc.  There was no second step for concept review.

Councilmember Kehe asked Mr. Rodgers to justify how staff arrived at the 48-foot figure in the staff report and Mr. Rodgers stated that his understanding was that a theater was going to come in probably around 44 to 46 feet in height and in order to hide roof equipment they might need extra height.

Councilmember Kehe advised that he had received a letter from a citizen who was the former Chairman of the Planning & Zoning Commission, stating that the Harkins Theater on 74 ^th Street just off of Scottsdale Road, which had some architectural features, was 42 feet high and a United Artists Theater in the Pavilions’  Shopping Center was 42 feet high.  He noted that Fountain Hill’ s Town Hall with the dome on the top was 43 feet high.  He said that there was sensitivity to height and at this point he was somewhat uncomfortable with the proposed 48-foot height limitation.  He added that he had not heard sufficient justification for that proposal.

Mr. Rodgers responded that there was a slope to the property and the front might be taller than the back of the building.

Councilmember Archambault commented that the idea behind the TCCD was to encourage development and not to put so many restrictions in place that they discouraged development.  He asked Mr. Rodgers to discuss the premise of the concept plan and Mr. Rodgers explained that any commercial, industrial or multi-family development must go through concept plan review. The Planning & Zoning Commission reviewed all of those for conformance with the Town’ s ordinances.  He said that this process was already in place and even anything in the existing TCCD or the C-2 zone had to go through that process if they wanted to get a building permit.  

Councilmember Archambault stated that the purpose then in what was being proposed was to keep a developer from going “ too far down the road”  and then having to come before the Council for a Special Use Permit.  If the concept plan was approved, the developers then would know that it was a go.  The idea behind the heights, as he understood it, was that 40 feet was where the Town wanted them to be but if there were architectural enhancements or something that enhanced the entire project, there was some flexibility.  Mr. Rodgers confirmed Councilmember Archambault’ s summarization and added that if the Planning & Zoning Commission decided to deny a plan because it was at 42 feet, they could always appeal that decision to the Council because concept plans were appealable before the Council.

Councilmember Leger stated that as a Council it was important to keep in mind that they had given very specific direction to staff relative to a new TCCD zoning district.  They were asked to look at the existing TCCD zoning and amend it.  The rationale was to create a zoning district in the downtown area that would enable viable development and the amendment was not for an approved project.  He said they need to look at this in terms of the Town of Fountain Hills creating a viable zoning district.  He commented on the fact that projects had come and gone because of a lack of the ability for shared parking and because of height issues.  He stressed the importance of remembering why they started down this road to begin with.  He stated the opinion that staff was attempting to create a “ level playing field”  and referred to the contents of staff’ s report.  He said that they needed to have some flexibility on the ground floors for commercial/retail development and he believed that the 48 feet was realistic.  He emphasized the importance of reviewing this amendment on the merits of what it was they were trying to accomplish in Town.  If downtown was the core, they had to decide whether it was okay to have more height, more density in that area.

Councilmember Kehe asked whether the shared parking would force Community Center, Town Hall and Library users on to the street.  He noted that crowded conditions already existed in certain areas.  Mr. Rodgers stated that the impact of the shared parking would be negligible because when the shared parking models were presented, whatever was presented must be sufficient to support the parking needs.

Ms. Zanon commented that typically when people were accessing a use they started by parking closest to the use and then continue to “ circle out”  until they found available parking.  In looking at a shared parking model, the times that you would have to “ circle out”  as far as the Community Center would typically not be the times when the Community Center would have significant events or competing use for the parking lot.  There were no guarantees that this would never happen but the odds were that there would not be many if any conflicts.

Vice Mayor Dickey stated that this was something they were changing in an effort to create certain things for the Town as a whole.  She said she wanted to ask about the residential part of this. They had talked in the past about percentages (available commercial versus residential) and noted that there was no percentage number in any of this but it seemed to be self-limiting or maybe implied by the fact that it was only on the upper floors.  She asked if there had ever been any discussion about a residential percentage versus commercial.

Mr. Rodgers replied that long discussion had occurred regarding that issue and staff agreed that it was self-limiting because they were not allowing residential on the ground floor facing the arterial streets.  If residential was going to be on the ground floor, it had to be on a different street or had to face inside and that left storefronts on the ground floor.  There may be one or two floors of offices on top but it was self-limited as the Vice Mayor stated.  He added that staff had emphasized that they would like to see 50% or less.  Mr. Rodgers responded to the Vice Mayor’ s question and advised that people who lived on the upper floors would be allowed to operate home occupations subject to the same restrictions/conditions for homes.

Additional discussion ensued relative to staff’ s report and Mr. Rodgers responded to a variety of questions/requests for clarification from the Council regarding set backs and building height.

Town Clerk Bev Bender advised that no requests to speak were submitted regarding this agenda item.  

The Vice Mayor declared the public hearing closed at 7:52 p.m.

Councilmember Leger MOVED to approve Ordinance 08-01 the Text Amendment to Chapter 18, Town Center Commercial Zoning District of the Zoning Ordinance and Councilmember McMahan SECONDED the motion.

Councilmember McMahan emphasized that although the Town had been working with a certain developer, the proposed zoning regulations were being established for the benefit of any developer that might come in; this amendment was not just for this one project.

Councilmember Leger stated that this not only benefited the developer, it also benefited the Town by enabling a build out in the downtown center that would attract much-needed amenities. They had talked a lot about revenue, revenue shortfalls and sales tax revenue but more importantly there had been a vision in the Town for many years and hopefully they could make it come to fruition soon –  a vibrant downtown. A lot “ feeds”  off of that; other businesses and residents could benefit as a result of this mixed-use action.

Councilmember McMahan concurred with Councilmember Leger’ s comments.

Councilmember Kehe said that he would like to hear a little more discussion on the members relative to the height issue.  He stated that he would be more comfortable with a 46-foot height restriction.

Councilmember Schlum commented that when he looked at the topography of that land and the slope that it presented and the buildings that they envision that were going to have to deal with that slope he believes that to be one reason to allow some flexibility as far as height.  He spoke in favor of allowing the flexibility to enable a development to come forward that most of them envision to be a viable one.  He added that the slope would obviously impact a theater and if 42 or 44 feet was customary, that would be on a flat piece of land.  He said given the location and the site, he believed they needed that language in there to allow developments to go forward.  He commended everyone who had been working on this process on their teamwork and efforts to move discussions forward.  He also spoke in favor of shared parking, particularly when there were various uses.

Councilmember Archambault noted that most of the commercial ceiling heights were 16 feet or more, with 16 feet being the norm.  That did not count all of the air conditioning units, trusses and everything above that, which adds another three feet for a total of 20 feet.  He agreed with the importance of flexibility and also indicated support for moving forward with the footage language as recommended by staff.

Vice Mayor Dickey said that she was comfortable with either 46 or 48 feet and spoke in support of the concept plan idea.  She noted that the issues would be looked at so if a majority of the Council supported the 48 feet she would support it as well.  She added that she was comfortable with the fact that the projects would be looked at on one level but they could actually come before the Council if that need arose.  The Vice Mayor stated that under Section D, Quasi-Public Uses, six items were listed but it did not expressly forbid education (interior design classes, etc.). She requested input on this issue.

Mr. Rodgers responded that schools were permitted uses under Section B.

In response to a request from Councilmember Leger, Mr. Rodgers briefly highlighted the uses that would be allowed as proposed in the staff report and confirmed for Councilmember Kehe that the 48’  height would not be the standard (40’  was the standard) and that both the Planning and Zoning Commission and staff would review anything over 40’  to ensure that the developers showed why the additional height was needed.

Councilmember Schlum thanked staff for their hard work and said that their efforts would enhance the community.

Vice Mayor Dickey called for a vote on the motion.

The motion CARRIED UNANIMOUSLY by those present (6-0).

Vice Mayor Dickey declared the public hearing open at 8:06 p.m.

Senior Planner Bob Rodgers addressed the Council and provided a brief overview of this item. Mr. Rodgers advised that that the Council voted to initiate revisions to the downtown area of the zoning map at their November 15, 2007 Regular meeting.  Staff had reviewed the existing zoning districts in the downtown area and had determined that the provisions of the TCCD zoning district best suited the Town’ s needs for facilitating downtown development.  Staff had drafted a proposal to change approximately 18.44 acres from the C-2 zoning district to the TCCD zoning district. The TCCD zoning district currently encompassed the area east of Saguaro Boulevard and north of Kiwanis Drive to Fountain Park. The proposed rezoning would enlarge the TCCD district as shown on a map included in the Council’ s packet.

Mr. Rodgers explained that the proposed zoning map revision would significantly change the TCCD zoning district boundaries and decrease the size of the C-2 zoning district in the downtown area.  These changes would increase the viability of commercial or mixed-use development proposals in a larger portion of the downtown area by allowing a great degree of flexibility in overall development design.  He discussed the General Plan’ s definition of Mixed Use and stated that it was staff’ s opinion that rezoning the area to TCCD would not require a General Plan Amendment and added that in fact such a rezoning would be in keeping with the General Plan’ s long-term vision.  He advised that the Planning and Zoning Commission voted at their regular meeting of January 10, 2008 to recommend that the Council approve the map amendment and staff concurred with that recommendation.

Ms. Bender advised that there were no citizens wishing to speak on this item.

The Vice Mayor declared the public hearing closed at 8:08 p.m.

Ms. Bender advised that there were no citizens wishing to speak on this item.

Councilmember Archambault MOVED to approve Ordinance 08-02, the proposed zoning map amendment as outlined in the staff report and Councilmember McMahan SECONDED the motion, which CARRIED UNANIMOUSLY by those present (6-0).

Ms. Zanon addressed the Council relative to this agenda item and stated that at the January 17 ^th meeting the Council made a motion to place a property tax on the ballot and asked staff to come back with a resolution that dedicated the property tax exclusively for funding public safety, fire and emergency services. The resolution before the Council was in response to that direction.  She indicated her willingness to respond to questions from the Council.

Councilmember McMahan emphasized that any property tax enacted in the community this year or in the future should be exclusively dedicated to fire, emergency services and law enforcement. He said that he supported the concept 100%.  He added, however, that since this motion pertained to the May 20 ^th property tax, which he unequivocally opposed, he could not support the motion at this time.

In response to a question from Councilmember Archambault, Town Attorney Andrew McGuire stated that this resolution dealt specifically with this Council’ s intent with respect to the ballot measure for May 20, 2008.  He said that because there would be a new Council after that time, if they decided to renew that resolution of intent for a subsequent measure it would have to be at that time.

Councilmember McMahan asked if the May ballot was voted down whether this one would go away and Mr. McGuire replied that if the funds were not approved it would go away.

Councilmember Schlum expressed the opinion that the resolution was written very well and if the citizens decided on May 20 ^th to approve a property tax, then he was pleased that the monies would be directed towards public safety, fire and emergency services.

Councilmember Leger MOVED to approve Resolution 2008-07 relating to the Town Council’ s intent to dedicate the primary property tax, if approved by the voters at the May 20, 2008 Special Election, exclusively to funding public safety, fire and emergency medical services and Councilmember Kehe SECONDED the motion.

Ms. Bender advised that there were no citizens wishing to speak on this item.

The motion CARRIED by majority vote of those present (5-1) with Councilmember McMahan voting nay.

Ms. Zanon addressed the Council and stated that also at the January 17 ^th meeting, the Council directed staff to come back with an ordinance that allowed the Town’ s Transaction Privilege Tax (sales tax) to be reduced if a property tax was passed.  The proposed ordinance had been prepared in response to that direction.  Ms. Zanon advised that at that meeting no rate had been determined and so the ordinance did not contain a rate.  If the Council approved the proposed ordinance this evening they would need to specify what the reduction would be as part of that approval.  She indicated staff’ s willingness to respond to questions.

Councilmember McMahan reiterated that he was totally in favor of reducing the sales tax if a property tax was enacted and, in fact, reducing it for other reasons any time they could.  He added, however, that since the motion was related to the May 20 ^th property tax, which he sincerely opposed, he could not support the motion at this time.

Councilmember Schlum requested that staff present the percentages and resulting ramifications on revenues to the Town given what was previously discussed (three tenths of one percent reduction) as well as perhaps a more “ robust”  rate.

Finance Director Julie Ghetti reported the following:

If the tax rate was reduced from 2.6% to 2.3%, the impact was approximately $4.4 million over a five-year period of time but over the 20-year period of time it was about $18 million;

If the tax rate was reduced from 2.6% to 2.1%, a $7 million reduction would occur over a five-year period of time or $30 million over a 20-year period;

If the tax rate was reduced from 2.6% to 2%, an $8.8 million reduction would occur over a five-year period of time or $36 million over a 20-year period of time;

If the tax rate was reduced from 2.6% to 1.75%, a $12 million reduction would occur over a five-year period of time or $52 million over a 20-year period of time; and

If the tax rate was reduced from 2.6% to 1.6%, a $14.6 million reduction would occur over a five-year period of time or $60 million over a 20-year period of time.

Councilmember Schlum commented that this decision would be solely based on the voters’ property tax decision in May.  He asked whether there would be an additional opportunity to reduce sales taxes further in the future should the Town’ s revenues become more stabilized and/or economic development thrives.

Mr. McGuire advised that the Town Council had the authority to change the Town’ s sales tax through an ordinance posted as any other agenda item would be.  He noted that in 2003 the Council voted to raise the sales tax by 1% and so the Council could raise it, reduce it or even eliminate it if they so choose.

Councilmember Leger thanked Ms. Ghetti for her work on this issue and expressed the opinion that reducing the sales tax by three tenths of a percent would not be very meaningful.  He added that if they decided to reduce the sales tax contingent upon the passage of the property tax to 1% they would be looking at reducing the revenues that they would be raising through property tax by over $60 million over a 20-year period of time and he believed that would be counter productive.  He added that if they looked at reducing it by five tenths of a percent (from 2.6% to 2.1%) it was still a large amount of money over 20 years (reduced the Town’ s total revenues from $86 million to $56 million).  He stated that at this point in time, taking everything into consideration, if the citizens of Fountain Hills did in fact decide to move forward with a primary property tax, he would support a reduction in sales tax by five tenths.  He added that if a primary property tax was put in place and it accomplished the goal of sustainability and stability with respect to the Town’ s revenue sources, he would not be opposed to taking a look at this in another couple of years and perhaps reducing the rate by another five tenths of a percent.

Councilmember Leger MOVED to approve the ordinance 08-04 reducing the Town’ s Transaction Privilege Tax rate by five tenths (.5%) upon approval of the voters at the May election of a primary property tax and Councilmember Kehe SECONDED the motion.

Mr. McGuire clarified that there were two items that needed to be addressed relative to the current form of the ordinance.  One was that the advertising tax was not included on the list and it should be. Section 8A-405 would also be amended pursuant to the motion.  And secondly, residential leases were currently at 1.6% as opposed to 2.6% and commercial leases were at 1% above the residential.  These two items were not on the list and would remain unchanged despite this motion.  He said that as long as the motion included the amendment to Section 8A-405, they may proceed.

Councilmember Leger stated that the motion did include the amendment referenced by Mr. McGuire and Councilmember Kehe concurred.

Mr. McGuire further explained that there were two sections of the Town’ s Tax Code relating to rentals, one was 445 and the other was 446.  He said that those two sections would not be impacted because they were not included on the list.  They were intentionally left off of the list because they were different today from the regular tax rate.

Vice Mayor Dickey commented that not only could the Council lower the sales tax at any time, they could also remove it from food if that was how they choose to proceed.  She added that at the current time she would support the proposed motion.

Ms. Bender advised that there were no citizens wishing to speak on this item.

The motion CARRIED by majority vote of those present (5-1) with Councilmember McMahan voting nay.

Ms. Zanon stated that the Council would receive a report to file a Notice of Intent regarding this item at their next meeting on February 21 ^st.

Vice Mayor Dickey advised that a citizen had asked her why the Council did not raise the fees based on the study that was done two or more years ago.  She said there was a bill passed last year in the Legislature that limited them but she wanted a clarification on this issue.

Mr. McGuire responded that what the Vice Mayor was referring to was Senate Bill #1423 from last year.  Staff spent the greater part of last year negotiating with the Homebuilders Association on what was considered to be some fairly wholesale sweeping changes to the statute.  The changes that they had finally agreed to (and a consensus was reached with the Homebuilders) were essentially structurally related.  They were requiring that the Town produce what was now called an Infrastructure Improvements Plan prior to or concurrently with developing an impact fee study so that the fees would be directly tied to an infrastructure plan.  In almost all of the communities he was aware of this was already being done in the form of a capital plan that was used as part of the development fee study.  However, the Homebuilders had experienced cities and towns that had not done that.  As one of the trade offs, cities seemed to be upping their fees every year or two so they were constantly doing the studies.  Staff proposed to them that that be somewhat leveled off if they would consent to having an automatic index built into the fees so that when the Town adopted their Infrastructure Improvements Plan (IIP), they were allowed to adopt an index by which the tax could increase and the fees could increase without the Council having to go all through the process again.  He added that it was meant to be tied to the regional construction industry so that it was a reasonable increase each year and it saved towns and cities monies because they did not have to keep going out and doing the studies to keep up.  It was generally viewed by most as a “ good thing”  but in order to implement it, they had to implement an Infrastructure Improvements Plan that the Town did not currently have.  The current update was to update the CIP, convert it into an IIP with the additional things required by the statute and build in the indexing provision required by the statute.

The Vice Mayor thanked Mr. McGuire for his clarification and explanation.

Councilmember Kehe noted that in the Interim Manager’ s Report under Development Fees Adjustment the action date for the Council was June 5, 2008.  He stated that in establishing the completion resolution on the items of Council business they wanted to complete these as far as possible before the current Council took leave.  He asked why they could not have the target date for Council action on development fees moved up to May 17 ^th when this Council would still be intact.

Mr. McGuire responded by saying that the statutory timeframes built into the current development fee statute affected this and it could not be accomplished by that time.  He added that the June 5 ^th meeting was the earliest opportunity they had to address this issue.

Ms. Ghetti stated that Step 1 would be the Notice of Intent, which was at the next meeting and that starts the “ clock ticking.”   After the Notice of Intent, there was a 60-day waiting period and then after the fees were adopted, there were 30 days and then 75 days.  She said that there was no way to move any of those dates.

Councilmember Kehe commented that they had been dealing with this issue for a while and asked why the item was not on an earlier meeting agenda.

Ms. Ghetti said that the legislation was new and because they were not doing a full-blown study they had to adopt the Infrastructure Improvement Plan.  They basically had to go back to the consultant that did the original study to see if they could take the original CIP and convert it over to an IIP that would meet the requirements of the statute and once the IIP was created, they could then move forward with the indexing of the development fees.  She stated that the IIP had been completed (copy was received on Monday).

In response to a question from the Vice Mayor, Mr. McGuire said that if the Council were to convene a Special meeting for this item to be put forward it could possibly occur in May.  Ms. Ghetti stated that she would have to go back and recalculate the days to see if that was a possibility.

Ms. Zanon advised that the downtown zoning was accomplished this evening.  She added that staff received a draft agreement, which was under review, and the next meeting with the development team was scheduled for tomorrow so they were moving forward.

Ms. Zanon stated that she had nothing new to report on this item other than the fact that the Work Study Session was coming up (February 12 ^th).

Ms. Zanon reported that the attorneys from MCO had contacted the Town to discuss the agreement so discussions were continuing.

Ms. Zanon said that staff had notified the Maricopa County Elections Department of its intent to place the property tax question on the May ballot.  Staff would work with legal counsel to prepare the publicity pamphlet.  The notice for pro/con arguments had been placed in the local paper and would run for two weeks (weeks of February 6 an 13).  Submissions were due in the Clerk’ s office by 4:00 p.m. on February 20 ^th.  Educational materials were being prepared by the Strategic Plan Advisory Commission’ s (SPAC) Subcommittee, which was working on developing neutral language to try to answer commonly asked questions related to a property tax. They would also be working in conjunction with the Public Information Office, Town management and the Town Attorney to ensure that strictly neutral informational language was used.  The materials would be made available to the citizens through a variety of ways.

In response to a question from the Vice Mayor, Ms. Zanon advised that the $100 fee to place a pro/con argument in the publicity pamphlet was submitted to the Town Clerk and should be made payable to the Town of Fountain Hills.

Ms. Zanon said that staff continues to meet with them weekly and work through their General Plan Amendment application.  A meeting was held today so staff was moving forward on this matter.

Ms. Zanon reported that staff had met with five contractors to obtain proposals to construct the concrete base as well as all necessary water lines and electrical/site work.  The contract amount was $23,538.  This would be presented to the Council at the March 6 ^th meeting with construction starting shortly after and ending by the end of March.

Ms. Zanon informed the Council that efforts continue to make progress on base map work and planning how to put the U-turn in.  Staff had a work order ready to present to the Council at the next meeting (February 21 ^st).  The amount of the work order was $21,979 to construct the U-turn and that would include all items such as removal of existing curbing, putting in handicap ramps, asphalt, etc.  The work would be done through the Town’ s annual contract with Markham Construction.  

Ms. Zanon added that several members of the Town team did go down to Tucson last week to visit with the Tucson Transportation Department.  The team presented an aerial photograph and discussed their area of the Town with them as well as HAWK signals they had in their area. They looked at similarities as well as differences and a lot of information came out of that meeting.  Staff was “ digesting”  the lessons learned in Tucson and deciding what would be appropriate to move forward.  They were still on track to bring this back on April 17 ^th.

Councilmember Leger said that he was happy to see that the construction of the U-turn was well under what was first put out to the citizens, $50,000.  He added that they started down this road primarily because of pedestrian safety and some people believe that the U-turn was shortsighted and added that the U-turn would probably not be permissible by law at the current location. Moving the U-turn down 150 feet or so not only addresses that issue, it could also be viewed as somewhat visionary with respect to the development of the south side of the Avenue.

Ms. Zanon advised that staff would look into the development fee adjustment time period and backtrack it to see if they could accomplish this item in May at a Special Session.

Mr. McGuire noted that this issue was not agendized under Item #17 so between now and the next meeting either the Mayor could have it placed on the Regular agenda as a discussion item or it could be placed under this agenda item at an upcoming meeting.

Ms. Zanon advised that one of the topics planned for the March Work Study Session (first Tuesday in March) was the remaining items of business that came out of the SPAC recommendations from December.  Councilmember Leger noted that Councilmember McMahan’ s item would be covered at the March Work-Study.  Councilmember McMahan acknowledged that would work.

Vice Mayor Dickey announced that starting today registered citizens could vote at Town Hall through March 7 ^th.

Councilmember McMahan MOVED that the Council adjourn and Councilmember Archambault SECONDED the motion, which CARRIED UNANIMOUSLY.  The meeting adjourned at 8:40 p.m.

                             TOWN OF FOUNTAIN HILLS

                            By __________________________

                                                                                Wally J. Nichols, Mayor

ATTEST AND

PREPARED BY:

_________________________

Bevelyn J. Bender, Town Clerk

I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Regular and Executive Session held by the Town Council of Fountain Hills on the 7th day of February 2008.  I further certify that the meeting was duly called and that a quorum was present.

DATED this 21 ^st day of February 2008.

                            _____________________________

                               Bevelyn J. Bender, Town Clerk